PATIL TELESOLUTIONS Vs. COMMISSIONER OF C. EX. , NASHIK

JUDGEMENT

(1.) HEARD both sides. The appellant filed this appeal against Order -in -Appeal No. IPL/14/NSK/2009 dated 22 -1 -2009 whereby the Commissioner (Appeals) has upheld the lower adjudicating authority's order imposing penalty under Sections 76 and 77 of the Finance Act, 1994. The appellant is a proprietary concern and holding Service Tax registration under the category of "Business Auxiliary Services". They have failed to pay Service Tax during the period from October, 2005 to Sept, 2006 by due dates. They also did not file ST -3 returns on due date. Therefore, proceedings were initiated against them under Sections 76 and 77 of the Finance Act, 1994. Accordingly penalty under Section 76 amounting to Rs. 93,900/ - and a penalty of Rs. 2000/ - under Section 77 were imposed by the lower adjudicating authority. The appellant challenged the same before the Commissioner (Appeals), who upheld the order of the lower adjudicating authority.

(2.) THE contention of the appellant is that they are a proprietary concern and small businessman engaged in the marketing telephone services of M/s. Tata Teleservices Maharashtra Ltd. and the business is run by the proprietor himself. He is not in a position to engage any Accountant or any other staff for day to day business. The contention is that there is no case against them for not paying Service Tax and they have not filed the ST -3 return. The only charge is delay in paying the Service Tax and filing the Service Tax Return. The contention is that the whole Service Tax involved in the case has already been paid and Returns were filed before issuance of show -cause notice on 3 -4 -2008. Therefore, the penalty imposed against them is not sustainable as per Section 80 of the Finance Act, 1994. In support of his contention he has placed reliance on the Tribunal's decision in the case of Commissioner of Service Tax, Kolkata -I v. D. Datta & Co. -2007 (7) S.T.R. 282 (Tri. -Kol.).

(3.) I have considered the submission and perused the records. The appellant is aggrieved by the penalty imposed under Sections 76 and 77 of the Finance Act, 1994. It is not in dispute that though the appellant paid Service Tax late and filed the Service Tax Return late but the appellant has paid the Service Tax and filed the Return on his own. I have also perused the show -cause notice. There is no case of suppression of facts. I find force in the contention of the appellant that they are small businessman and not in a position to appoint Accountant and other staff to look after the day to day work of Service Tax and due to this the payment was made late. So far as the contention of the learned SDR that repeatedly he has paid the Service Tax late and, however ld. SDR has not able to produce any evidence to show any action taken against the appellant by the department on those occasions. I find that the appellant is a small businessman and proprietary concern and first time in the business, and paid the Service Tax on its own before being pointed out. Therefore, it is a reasonable ground for not imposing any penalty under Sections 76 and 77 ibid. Similar view has been taken by the Tribunal in the case of D. Datta & Co. (supra), wherein it was held that they were innocent and the assessee filed Returns and deposited the Service Tax much before issuance of the show -cause notice, therefore, they had no intention to evade payment of Service Tax and upheld the lower appellate authority's order in not imposing the penalty. As regards the contention of the learned SDR regarding the applicability of Hon'ble Supreme Court's decision in the case of Rajasthan Spinning & Weaving Mills (supra), I find that in the show -cause notice there is no allegation of suppression of facts, fraud etc. as envisaged under Section 11AC of the Central Excise Act, 1944. Therefore, the same is not relevant to this case. In view of the above discussion, the order of the learned Commissioner (Appeals) is set aside and the appeal is allowed.